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Bulls Add To Net Length In Gold, Silver Futures

(Kitco News) - Large speculators increased their overall bullish positioning in gold and silver futures during the most recent reporting week of the Commodity Futures Trading Commission.

However, in the case of gold, the activity from traders was somewhat mixed, as bulls and bears alike increased their exposure, although the bulls did so by a slightly larger number.

The most recent data, released late Friday, covered the week-long period through Feb. 7. During this time period, Comex April gold rose by $24.70 to $1,236.10 an ounce, while March silver gained 21.3 cents to $17.756.

Net long or short positioning in the CFTC data reflect the difference between the total number of bullish and bearish contracts. Traders monitor the data to gauge the general mood of speculators, although excessively high or low numbers are viewed by many as signs of overbought or oversold markets that may be ripe for price corrections.

The “disaggregated” report shows that money managers upped their gross bullish positions in gold futures by 1,879 lots, slightly more than the 1,567 increase in bearish ones. This meant a net-long, or bullish, position of 70,149 lots, a modest increase from 69,837 in the previous reporting week.

“The perceived delays to President Trump's fiscal agenda, a flattening yield curve and the lack of any definite signals from the Fed, [showing] that it is ready to lift rates aggressively, persuaded money managers to aggressively increase their net gold exposure,” said a research note from TD Securities. “With gold prices starting to hit technical residence, traders did not take a one-way long bet; ?they also took out significant, albeit smaller, short positions.”

In silver, traders both added to bullish bets and scaled back bearish ones, the CFTC data show.

“According to the CFTC’s statistics, speculative financial investors are continuing to expand their net-long positions in silver, albeit only in small steps,” Commerzbank said.

Money managers’ gross longs rose by 1,191 lots in silver futures, while short – or bearish – positions fell by 506 lots. This left a net-bullish position of 65,561 lots, up from 63,964 the prior week.

By Allen Sykora of Kitco News; asykora@kitco.com

 

 

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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